M&A wrap: Fiberon, Fortune Brands, ModoPayments, CD&R

fiberon

Master Lock owner Fortune Brands Home & Security Inc. (NYSE: FBHS) is acquiring deck materials maker Fiberon LLC for $470 million. The deal expands Fortune's presence in the $2.5 billion deck category. According to Fortune, decks are a critical growing segment of the outdoor sector with a rising need for non-wood materials, which is where Fiberon focuses the majority of its business. "This exceptional growth is driven by demand for innovations in finishes, textures, colors and styles, coupled with low maintenance and lasting durability versus traditional wood," according to a Fortune release. Fiberon, which posted 2017 sales of $200 million, also makes materials for fences and rails. “The acquisition of Fiberon provides exciting category expansion and product extension opportunities for our doors and security segment into the outdoor living space— one of the fastest growing areas of the home,” says Fortune CEO Chris Klein. “Fortune Brands’ strong distribution, commitment to brands, innovation and design, and superior execution are a powerful combination to drive sales and profit growth,” adds Fiberon CEO Doug Mancosh. In addition to securities, Fortune operates a home products division that manufactures cabinets, plumbing supplies and windows and doors, featuring the KitchenCraft, Rohl, and Therma-Tru brands.

The energy industry is teeming with M&A activity, as companies seek to improve operations. Hubbell and Ingersoll Rand are among the strategic buyers. Private equity firms acquiring include AE Industrial Partners, Clayton, Dubilier & Rice and Genstar Capital. Companies in the energy industry are focused on improving operational efficiencies and analytical capabilities. The issues are urgent for oil and gas companies, because depressed prices mean profits are hard to come by, says Caroline Blitzer Phillips, who advises clients on energy deals as a partner at law firm Vinson & Elkins. They are also essential for renewable energy, which “has been quite expensive in some cases, because the infrastructure is not in place.” From providers of “smart grids” to developers of energy management software, Mergers & Acquisitions looks at recently acquired targets. Read the full story: 14 smart energy deals.

Deal news
Shore Capital Partners-backed EyeSouth Partners has formed a partnership with Florida Eye Microsurgical Institute and Boynton Beach ASC. The target operates four locations in Florida that perform surgery and offer other eye care services. Companies in a wide of range of healthcare subsectors, including vision specialists, are attracting private equity investors. Read our in-depth feature: Why private equity firms like veterinarians, opthamologists and dentists.

Deutsche Bank is acquiring a stake in digital payments company ModoPayments. The investment will allow Deutsche Bank to expand into non-bank payment platforms such as Alipay, Paypal, M-Pesa and WeChat. Skadden Arps Slate Meagher & Flom is representing Deutsche Bank.

Indiana Packers Corp., a maker of pork products under the Indiana Kitchen brand, is buying Specialty Foods Group, an independent producer of processed meat products. Paul Hastings is representing Indiana Packers, and McDermott Will & Emery is representing SFG.

Trinity Hunt Partners has bought Veracity Research Company, a provider of investigative services for insurers and businesses.

TriWest Capital Partners has invested in PRT Growing Services, a provider of forestry seedlings and logistics.

For more deal announcements, see The weekly wrap: Cava Group, Hartford Financial, Tyson Foods.

For PE fundraising news, see PE fundraising scorecard: TPG Asia and Versey Street Capital.

Featured content
As Indra Nooyi ends her 12-year run in the top job at PepsiCo Inc. (NASDAQ: PEP), the number of women CEOs in the S&P 500 drops to 24. But in the middle market, a growing movement is nurturing women-led companies. For example, Lorine Pendleton, a member of Pipeline Angels, focuses on inclusion investing, backing companies led by diverse entrepreneurs. Read the full story: Inclusion investing nurtures companies led by women and minorities.

Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, startups and M&A advisory firms for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Street banks, including Merrill Lynch Wealth Management and Citi Private Bank, Krawcheck serves as the CEO of Ellevest, an online investing platform for women. Mergers & Acquisitions participated as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated a panel. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.

Mergers & Acquisitions has announced 11 Rising Stars of Private Equity, including John Kos, GTCR; Ethan Liebermann, TA Associates; Jennifer Roach, Yellow Wood Partners; and Afaf Ibraheem Warren, Siris Capital . The up-and-coming investors are expected to play significant leadership roles in the future. See: Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.

While some of the firms that were instrumental in launching the middle market back in the 1980s and 1990s have long since been shuttered, their legacy lives on. They proved to be excellent training grounds for many successful dealmakers. Heller Financial certainly belongs in this category, and Mergers & Acquisitions featured its alumni a few years ago. Another firm with a far reach is Holleb & Coff, a Chicago law firm that closed in 2000, after a nearly 50-year run. Founded by Marshall Holleb and Morris Coff in 1951, the firm advised prestigious clients, such as American National Bank, Hollinger International Inc.and LaSalle Bank. Revenue topped $40 million in 1997. In its heyday, Holleb & Coff employed 130-plus attorneys; it was the law firm to work for in the Midwest. Drawn to the supportive culture, new associates and seasoned partners alike enjoyed working at the venerated firm. Many of the lawyers who worked at Holleb & Coff back in the day are making a significant impact on M&A today, including: John Corvino, general counsel to the Chicago White Sox; · Brian Kerwin, chair of Duane Morris’ global corporate practice; Theodore (Ted) Koenig, the founder and CEO of Monroe Capital; Kenneth Serota, president of Hu-Friedy Manufacturing Co., and Michelle Warner, general counsel, USG Corp. (NYSE: US). Read the full story: Holleb & Coff alumni: Where are they now?

See Mergers & Acquisitions' look at 10 PE firms that have succeeded in raising new funds recently despite an overall slowdown in PE fundraising, including the Carlyle Group (Nasdaq: CG), PPC Partners, Soundcore Capital Partners and Sycamore Partners. For the latest on PE fundraising, see PE fundraising scorecard: Ridgemont Equity and Yellow Wood.

Procter & Gamble Co. (NYSE: PG) is focusing on growing its top 25 brands, including Bounty paper towels, Charmin toilet paper, Crest toothpaste, Pampers diapers, Nyquil cough and cold medicine, and Tide laundry detergent, while seeking acquisitions. In April, P&G announced plans to buy Merck KGaA’s consumer-health business for $4.2 billion. The deal includes the Femibion and Neurobion over-the-counter healthcare brands. P&G is also purchasing skincare brand First Aid Beauty. “What you have to have is the brand consumers prefer, because then retailers want to carry it, because it builds the basket,” P&G CEO David Taylor explains. Read the full story: Why P&G is changing its M&A strategy.

Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater AssociatesRay Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’ Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.

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